A November to Remember… (But wait, there’s more?)

The S&P 500 gained another 3% in November to obtain a new high level mark above 1800. These are new historic levels and should give all of us something to be thankful for this year.

Now for the downside of strong stock market returns…

With high returns comes high expectations. As investors, we often succumb to “recency bias” where we start to believe that what has occurred recently, will continue on in the future. In 2009 investors felt as if the market would continue to zero. Now with the market hitting new highs investors may start to get complacent and expect high returns every year.

While we are not seeing any of the typical warning flags that we associate with recession or market declines, we do want to help investors stay grounded in their view of markets and risk.

Over the next week, we will get additional economic data that will give us a clearer picture into where the economy and markets may be heading for the remainder of the year.

If these reports come in with favorable outcomes it’s likely that higher prices could be on the way for the Christmas season. If not, Santa may be forced to deliver a lump of coal this Christmas.

All kidding aside, it has been a very good year for equity investors. As things stand today, the data continues to support the current bull market. November through May is seasonally the strongest part of the year and we see nothing that leads up to think it will be different this time.

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Disclosures

Securities offered through Triad Advisors, a Registered Broker/Dealer, Member FINRA/SIPC. Investment Advisory Services offered through Financial Analysts, a member of Advisory Services Network, LLC. Managed Futures offered through FFI Alternatives, LLC, member of the National Futures Association (NFA) and registered with the Commodity Futures Trading Commission (CFTC). Triad Advisors, Advisory Services Network, LLC, and FFI Alternatives, LLC are not affiliated.

Information is based on sources believed to be reliable; however, their accuracy or completeness cannot be guaranteed. Indexes cannot be invested in directly, are unmanaged and do not incur management fees, costs and expenses. The opinions expressed herein are those of the authors and do not necessarily represent those of Advisory Services Network, LLC, Triad Advisors, Inc. or FFI Alternatives, LLC. Past performance does not guarantee future results. Technical analysis is a method of evaluating securities by analyzing statistics generated by market activity, such as past prices and volumes. Technical analysis attempts to predict a future stock price or direction based on market trends. The assumption is that the market follows discernible patterns and if these patterns can be identified then a prediction can be made. The risk is that markets may not always follow patterns.

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